Opportunity Cost

Opportunity apostrophize for finish making: A learn method resource to describe the difficulties of practice INTRODUCTION: The difficulties associated with the determination of opportunity price as a stopping wind making aid atomic number 18 chiefly not discussed in the management accounting connect texts. save most of the new management texts devote at to the lowest degree some coverage to the calculation of relevant cost and benefits for the decision making, and normally the concept of opportunity cost is apply as an integral part of this coverage. Opportunity cost is be by many of the economists, but the main focus of all unitary of them is on the contribution or profit that is forgone (rejected) by utilize termed resources for particular purpose. OC remains at the nucleus of study of decision making today, it being seen as effectual both in the calculation of merit of competing ersatzs and as a way describing the preferred alternatives. This resear ch paper comprises of following(a) parts: Strengths and demarcation line of Opportunity Cost. A worked example that elaborate the difficulties which may limit OC as a practical decision aid. An alternative interchange flow approach that overcome the difficulties by the use of OC approach. parole and Conclusions.

STRENGTHS AND LIMITATIONS OF OPPURTUNITY COST: As a decision making aid, OC is commonly seen to have three areas of strength: 1.It forces term of all alternative course of action 2.It is a convenient, expedient and stinting technique of analysis 3.It has certain communication advantages. It c an highlight the boilers tally benefit of ! a particular decision. Exploring of the above strengths are as follows: ?Decisions are concerned with choices between alternatives and, consequently, any method of define costs and revenues for decisions which attempts to deal with opportunities in isolation is unlikely to guide a complete analysis.The main importance of the opportunity-cost concept is that it forces the decision...If you deficiency to get a full essay, order it on our website: OrderCustomPaper.com

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